Jeera traders call for raising position limits with regulator

Mumbai: Jeera product committee members have urged the National Commodity and Derivatives Exchange (NCDEX) to take up the issue of margins and position limits with the regulator, according to an exchange statement late on Monday.

New position limits, which came into effect last week, stipulated that open positions for near-month contracts for jeera be capped at 120 tonnes for members and 40 tonnes for clients, from 600 tonnes and 200 tonnes, respectively.

The commodity market regulator, Forward Markets Commission (FMC), had earlier refused to review the lowering of open position limits in commodities futures.

Praveen Bhai Patel, president of Unjha Futures Trading Association and also a product committee member, said the increased margins and reduced position limits would hamper futures trading and also true price discovery, according to the statement.

The exchange would facilitate a meeting of assayers, warehouse providers and also the trading community to address all issues relating to smooth running of the contract, Shrikant Subbarayan, chief business officer, NCDEX, said in a statement.

The product committee had earlier intended to resign en masse after their goods were rejected by the exchange’s accredited warehouses on quality grounds. A meeting of product committee members and exchange officials would be held on 23 June to analyse the assaying methodology, the exchange said.